408 5th Ave

Grinnell, IA 50112

$124,000D

3 bd · 2.0 ba · 1,338 sqft · Built 1900 · SingleFamily · Active · 150 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,012/mo
• Mortgage (P&I): −$650
• Tax + insurance: −$220
• HOA: −$0
• Vac / Maint / Mgmt: −$212
• Net cashflow: $-71/mo
• Annual: $-855/yr
• Cap rate: 5.60%
• Cash-on-cash: -2.46%
• DSCR: 0.89
• 1% rule: 0.82%
• Cash to close: $34,720

Investor read

• This is a 3-bed/2.0-bath single-family listed at $124k.
• At list price, monthly cash flow is $-71 ($-855/yr) — negative.
• To cash-flow at today's rent, offer at most $111k (10.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $101k (18.4% below list).
• It's been on market 150 days — a 12% lower offer ($109k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $101k (18.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $857 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#123 in IA, #2,270 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Grinnell-Newburg Community School District (town): math 76% / reading 79% proficiency, ranked #47 of 289 in IA (top 16%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Fairview Elementary School (243 students, 32% FRL); Grinnell Community Middle School (math 74% / reading 77%, grade A, #65 of 246 statewide, top 29%, 457 students, 33% FRL); Grinnell Community Senior High School (math 77% / reading 83%, grade A, #32 of 336 statewide, top 10%, 471 students, 30% FRL) — zoned schools at 32% FRL track the district average.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 98 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); 43% of comp listings sitting > 30 days — soft ceiling on asking rent; 27 units permitted in Poweshiek County in 2024 (0 in 5+ unit buildings).
• Poweshiek County population projected to shrink 3% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 11y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 2.9% in Grinnell — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 150 days. Have you received any prior offers? Is the seller open to a 18% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.